Wheat Farmers Expected To Harvest Just 67% Of Planted Area, Lowest Since 1917, As Dry Weather Bites

As the U.S. economy is grappling with multiple headwinds that have been spearheaded by the impact of the Federal Reserve's aggressive rate hikes, another risk is looming on the horizon: dry weather.

What Happened: Wheat farmers are expected to harvest just 67% of the planted acres, data released by the U.S. Department of Agriculture (USDA) on Friday revealed.

The harvest ratio would be at the lowest since 1917, as dry conditions in Colorado, Kansas, Nebraska, Oklahoma and Texas have significantly impacted wheat crop.

The USDA noted that, while winter wheat production is expected to rise 2% to 1.13 billion bushels this year, the yield is expected to drop to 44.7 bushels per acre.

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Why It's Important: Wheat harvest has been impacted for years by dry conditions on the U.S. Plains, Bloomberg reported. Some wheat plants this season were so stunted due to a lack of moisture that they were unlikely to produce heads of grain, the report added. As a result, farmers can choose to file for crop insurance for failed acres, the report said. Bloomberg additionally noted that, this week, analysts are set to make their annual tour of the key wheat-growing state of Kansas to survey fields and estimate production.

Following the release of the report, the most-actively traded July futures contract trading on the CBOE rose 1.28% to 535.25 cents a bushel on Friday.

The Teucrium Wheat Fund WEAT, an exchange-traded fund that tracks prices of wheat futures, ended Friday’s session up 0.79% at $6.39, according to Benzinga Pro data.

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